The construction industry has lagged the general economy in productivity growth for 70 years. With $4.6 trillion of infrastructure rebuilding required over the next 8 years, project owners will be pressed to achieve maximum cost efficiency in order to stretch limited funding dollars as far as possible. This is the second in a series of posts that explores the stakes of rebuilding this country's infrastructure for each party in the construction value chain. Today we discuss construction contractors.
Construction contractors that become e-Construction businesses will lead a multi-trillion dollar building cycle. Those that do not will lose bids.
State departments of transportation (DOTs) receive about 60% of highway project funding from the Federal Highway Administration (FHWA). In recent years the FHWA has been pressing for adoption of "e-Construction" practices throughout the value chain, defined as:
"A paperless ... delivery process that includes electronic submission of all construction documentation by all stakeholders, ... e-signature[s], and digital management of all construction documentation in a secure environment allowing distribution to all project stakeholders through mobile devices."
Based on McKinsey Global Institute estimates, over $1 trillion of savings can be realized by applying technology to improve supply chain management and operating efficiencies. Of course these savings will be shared jointly by the contractors and the project owners, meaning higher margins for the industry and cost savings for project owners.
There are many construction technology solutions available today, most of which are offered as subscription services:
- Electronic document systems
- Web-hosted supply chain integration
- Building Information Modeling (BIM)
- RFID tracking
- GPS tracking
So, the stakes are clear for contractors:
Take advantage of available technology solutions to streamline your costs and you will be favored by project owners that are being pressed by the FHWA to demonstrate e-Construction practices. In the process you will improve your margins as you enjoy participation in a $4.6 trillion infrastructure boom of smart infrastructure construction.
Do not evolve and lose bids to those that do.
Our purpose at Idencia is to offer precast RFID tracking solutions that improve productivity throughout the value chain. Our subscription offering applies to products from the time of manufacture through end-of-life. As a cloud-hosted product tracking system that is seamless between manufacturers, contractors and asset managers, Idencia adds information value to all, eliminates redundancy and saves time. If you would like to learn more, click below.